Victoria, Australia is in its fourteenth year of drought and its capital city, Melbourne, is experiencing increase in water demand due to its growing population. Water authorities in Melbourne are promoting how to save water at home including using water efficient appliances. This paper calculates potential water savings from water efficient appliances by comparing water usage between households with water efficient appliances and those without. This study was based on the water consumption data recorded at 5-second intervals from logged households collected by Yarra Valley Water in Melbourne in 2004. A potential savings of up to 66 kL/household/yr or 35% reduction in average daily indoor use/household/yr can be achieved by converting into front loaders, AAA shower heads and dual flush toilets. As the results were based on 2004 data the effect of water conservation measures launched after 2004 including Target 155 were not incorporated in the calculation of potential savings in this report.